McDonald’s has not had an easy road. It had to continually rebrand itself to keep up with changing consumer sensibilities around health.
It has also had to shift strategies to keep up with competition from other QSRs — which is no longer just about the “burger wars” between McDonald’s, Burger King and Wendy’s, but has expanded to the breakfast hour as more chains crowd into the category that — for a while at least — set McDonald’s apart.
Now, with the addition of kiosks, the burger chain is turning its eye to customer experience and choice. It will be adding these self-service stations at a rate of 1,000 U.S. stores per quarter for the next eight to nine quarters, according to CNBC.
“We’re trying to add more choice and variety,” said McDonald’s CEO Steve Easterbrook. “Two years ago, if you were a customer, there were two ways you can get served at McDonald’s. You walked to the front counter and line up and take your drink and find a table or you go through the drive-through. We’re introducing many options. They can order through mobile, they can come curbside and we’ll run it out, as well as the existing traditional ways. You can pay in different ways and customize your food in different ways.”
The Kiosk Wave
McDonald’s is far from the only QSR turning to alternative ordering methods to increase consumer choice. According to PYMNTS’ Kiosk and Retail Report, a USA Technologies collaboration, the U.S. interactive kiosk market was worth $717 million in 2016, the most recent year for which data was available. Thirty percent of those kiosks were in the food and beverage market, making it the country’s largest kiosk category.
Overall, revenue from “intelligent vending machines” is projected to reach almost $12 billion by 2025, noted the report.
However, perhaps the most important number for McDonald’s is this: One study showed that fast food customers spend an average of 30 percent more when they place their own orders at a self-service kiosk station. In the face of flagging foot traffic, McDonald’s could definitely use the sales and revenue boosts from larger tickets.
Kiosks As A Component Of Choice
Other recent efforts by McDonald’s include the introduction of premium, “Signature Crafted” burgers back in April. These higher-quality burgers sell for $1 to $2 more than their classic counterparts.
Signature Crafted burgers and ordering kiosks were both originally introduced in 2016 as part of the company’s turnaround plan, but that first attempt did not quite live up to expectations. The customizable “Create Your Taste” burgers were adding too much complication and slowing down kitchens, leading McDonald’s to distill some customer favorites into today’s Signature Crafted menu.
In April, the company switched to making all Signature Crafted burgers with fresh beef, not frozen, and introduced the option to order them with chicken instead of beef.
The company is also introducing a table service option at this time, noting that, “when people dwell more, they select more.” Like the kiosks, even if this additional ordering option doesn’t increase foot traffic, it can still help the bottom line by boosting the average check.
In addition, in the name of choice, McDonald’s has been experimenting with delivery in select U.S. markets.
Can Choice = Foot Traffic?
If Easterbrook’s comments are any indicator, the chain is hoping that the increased customer choice offered by kiosks and healthier menu options could help boost foot traffic by creating the possibility for many different types of McDonald’s experiences.
For four years, McDonald’s was hemorrhaging customers — Easterbrook estimates that half a million drifted before the company broke the falling foot traffic trend last year. Time will tell if the chain’s recent focus on choice can help draw some of those customers back or, perhaps, help attract new ones.
Notably, many McDonald’s locations overseas — Canada, Australia, and the U.K. — are already equipped with kiosks and fully integrated with multiple self-service forms of ordering, as well as a mobile order-ahead capability. McDonald’s has a robust delivery business that’s been established in Asian markets for years. So, it’s clear that these strategies can succeed — it just depends on the market.